HSBC and Bank of China: Economy and Mortgage Rates

The two main home lenders in Hong Kong, HSBC Holdings Plc (HKG:0005) and Bank of China Ltd both raised their mortgage rates, the move will add to the pressure on property prices.

HSBC will now charge 1.5 percent below there its best rate for mortgages above HK$1.5 million ($194,000). According to calculations by Bloomberg this will bring the HSBC home loan rates to around 3.5 percent.

This is the biggest increase in rates by HSBC since 1997-98 when Asia was amid a financial crisis. However HSBC have said they aim to maintain margins as banks, generally banks in Hong Kong follow the US Federal Reserve rate cuts as the Hong Kong currency is pegged.

Bank of China, Hong Kong will also raise its mortgage rates, they will be offering discounts of 1.5 percent from its best rate as long as the loan is above HK$1.5 million, and these rate changes will be effective from December 4.

Source: Bloomberg Shadow Builder movies